Emails show pressure from White House to finalize Solyndra's Department of Energy loan due to scheduling issue

Widening the probe into Solyndra's collapse, House Republicans at a hearing Wednesday released emails showing that White House aides pressured budget officials to finalize a decision on a $535 million loan guarantee to the solar panel maker because they were eager to have Vice President Joe Biden announce the news at Solyndra's 2009 groundbreaking ceremony in Fremont.

But while the released emails indicated the White House was eager for a decision on the loan, they do not reveal that the Obama administration pushed for a particular outcome. Nor did they contain evidence that George Kaiser, a prominent Obama fundraiser and visitor to the White House, had any direct influence or involvement in the Solyndra loan.

Many conservative critics have focused on Kaiser because Argonaut Venture Capital, the investment arm of the Tulsa, Okla.-based George Kaiser Family Foundation, is Solyndra's largest private investor. They speculate that Solyndra's loan was either approved or expedited at the request of Kaiser and other political donors to President Barack Obama's 2008 presidential campaign.

The bitter bipartisan divide on Capitol Hill was clear in the four-hour hearing. Republicans on the House Energy and Commerce Committee hammered the administration's support of Solyndra as "crony capitalism run amok," while Democrats argued that the United States is losing the cleantech race to China and that Republicans were trying to discredit clean energy just as they have dismissed the scientific evidence of climate change.

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Under questioning from Rep. Henry Waxman, D-Los Angeles, both Jonathan Silver, director of the Department of Energy's Loan Programs Office, and Jeffrey Zients, deputy director of the Office of Management and Budget, testified that they have never met or spoken with Kaiser.

But the two officials faced fierce questioning from House Republicans, who questioned the process by which Solyndra's original loan was approved as well as the Department of Energy's decision to restructure the debt when Solyndra was running out of cash earlier this year. And they raised concerns about pending Energy Department loans to cleantech companies. The department has about $10 billion left to spend before the loan program, which is funded by the federal Recovery Act, sunsets Sept. 30.

"Is Solyndra one bad bet or the tip of the iceberg?" Oversight and Investigations Subcommittee Chairman Cliff Stearns, R-Fla., asked in his opening statement.

The FBI and investigators with the Department of Energy's Inspector General's Office raided Solyndra's offices last week. While the search warrant affidavit remains under seal, many speculate that investigators are looking for evidence that Solyndra defrauded the government by misstating sales and revenue projections. Silver and Zients both testified that they do not know what triggered the raid.

Solyndra's loan was originally submitted in 2006, when President George W. Bush was in office, and made its way through an often cumbersome three-year interagency vetting process.

Intense pressure

The released emails show that some officials in the Office of Management and Budget felt they were under intense pressure to wrap up the process. "We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around," an unnamed OMB aide wrote in an email to Biden's office.

The pressure the budget office felt apparently was the result of the Obama administration's eagerness to show its support for clean technology. In August 2009, four days after an independent credit agency issued its risk rating for the Solyndra deal, a special assistant to former White House Chief of Staff Rahm Emanuel emailed OMB and DOE staff and asked "as the closing of the Solyndra deal nears, we want to think about the potential announcement value in this. We know that the conditional agreement was already announced in March. That said, the VP will be in California in early September, and want to see if it's worth doing something here."

While Republicans alleged the White House emails revealed pressure for approval for the loan, Zients said they merely concerned "scheduling logistics."

"This had nothing to do with the decision to give the loan to the company or not," he said.

Brian Harrison, Solyndra's CEO, and Bill Stover, Solyndra's chief financial officer, are expected to appear before the committee Sept. 23. The two did not appear Wednesday because they are seeking a buyer for the company and its assets as part of the bankruptcy proceedings. Many speculate that the two will plead the Fifth Amendment rather than testify.

House Republicans also want to invite Chu and OMB chief Jacob Lew to testify.

In a further widening of the Solyndra probe, the Treasury Department's inspector general is investigating the Federal Financing Bank's role in the loan, Bloomberg News reported Wednesday. Solyndra drew down $527 million of the $535 million before filing for bankruptcy.

Whatever the outcome of the Solyndra saga, political observers say it already has damaged Obama.

"We don't know yet whether this was an intentional effort to get around the rules or just a bad decision," said Dan Schnur, a former Republican strategist and director of the Jesse M. Unruh Institute of Politics at the University of Southern California. "But sometimes bad decisions have just as much impact as political scandals. You didn't hear the president talk about green jobs or clean technology in his speech to Congress last week. There may not be a scandal, but there are still serious political ramifications."

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.